Cryptocurrency Mining and How Is it working?
In mining, in each block in which a transaction is recorded, one selected person is the helium mntd miner. That person performs a fraud check. How one checker is selected from the minors is the rule that “the person who spent the most electricity bill and performed computer calculations” becomes a checker. This rule is called proof of work (pow). The power consumption issue for bitcoin to run is related to mining, which is the transaction confirmation work of bitcoin.
What is proof of work (pow)?
Since the person elected as the verifier is supposed to be rewarded with bitcoin, miners will consume more power and perform calculations to be elected.
Suppose the rule is that a person who pays a lot of money called an electricity bill is elected as a checker. In that case, the system’s reliability will be lost if you allow unauthorized processing. The value of the reward you receive will be low, then the electricity bill you have already paid cannot be recovered. That’s a problem.” with that in mind; there is an incentive to “be sure to re-create fraud and keep bitcoin regular. By creating such incentives, bitcoin has been able to handle fraud-free operations.
The power consumption issue
In this way, consuming a lot of electricity also improves the security of bitcoin, and there is a very different judgment of good or bad. Projects trying to mine bitcoins with clean energy in the term of bitcoin are in the midst of the discussion, such as whether it will lead to denying bitcoin’s decentralization (the absence of a particular operator).
This issue will continue to be discussed as a problem for bitcoin for a long time. The power consumption issue for bitcoin to run is related to mining, which is the transaction confirmation work of bitcoin. So, it is good to keep an eye on bitcoin-related people.